Wednesday, October 9, 2013

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Part I of this occasional series on government and political philosophy is here.

Ancient Greece is rightly known as the cradle of democracy. Athens was ruled for centuries through a type of democracy in which regular people rotated through the various democratic institutions, doing their civic duty to help make the right decisions for all Athenians. Athens was far from democratic in a modern sense because many residents were slaves and could not take part in the democratic process. Nor could women.

Tam Hunt

What is far less well-known is that ancient Athens’ most famous sons, Plato and Aristotle, were staunchly anti-democratic and railed against the excesses of democracy as they witnessed it. Plato, for example, decried the democratic mob — actually a jury of 500 Athenians — that voted to execute Socrates, Plato’s mentor. Socrates was executed for the crimes of corrupting the youth of Athens and of impiety, apparently for advocating recognition of different gods than those recognized by the state (according to Plato’s well-known dialogue, the Apology).

Will Durant, in his excellent The Story of Philosophy, wrote of Plato’s views: “But even democracy ruins itself by excess — of democracy. Its basic principle is the equal right of all to hold office and determine public policy. This is at first glance a delightful arrangement; it becomes disastrous because the people are not properly equipped by education to select the best rulers and the wisest courses.” Plato wrote in the Protagoras: “As to the people, they have no understanding, and only repeat what their rulers are pleased to tell them.”

We hear echoes of Plato’s arguments today on both the right and the left. Conservatives are often of the republican (small r) type who praise representative democracy, as opposed to direct democracy, and the need for professional politicians to focus on the problems of governance that are beyond the ken of the average person’s time, interest, or ability. On the left, we have sometimes similar arguments decrying the lack of wisdom of the working-class white folk who unwisely vote for conservatives who will implement policies that go against the interests of those same voters (see Thomas Frank’s What’s the Matter with Kansas, for example). Even though we often hear conservatives criticizing liberals as “elitists,” the frequent criticisms of direct democracy from both sides of the aisle reveal a strong elitist strain across the spectrum.

Here in California we often hear a newspaper editorial or TV pundit advocating a no vote on a particular initiative, even though the initiative may contain good ideas, because we’ve just gone too far with this experiment in direct democracy. California’s system of direct democracy, we often hear, with its initiatives, referenda, and recalls, has made the state all but ungovernable. We shouldn’t encourage major decisions by initiative because we need a professional class of decision-makers to make those hard decisions for us. That’s why we elect leaders: to make good decisions for us.

Hogwash and poppycock.

Crowd wisdom in the private sector is increasingly being shown to be better at solving serious problems and making tough decisions than the so-called experts. This body of evidence provides strong support for the idea of expanding direct democracy, which I fleshed out in Part I of this series of essays, summarized as follows: We should utilize online voting and an expansion of what voters are allowed to vote on as a way to better utilize the wisdom of the crowd, to reduce corruption, and to reduce the need for all-too-rare enlightened leadership. Power should devolve to the most appropriate level of governmental or nongovernmental organization in order to maximize freedom and to find the best solutions to on-the-ground problems. I labeled these ideas “progressive libertarianism” or “isocracy” — rule by equals.

The difference between the Athenian era and today is that the large majority of the electorate is plenty educated and plenty equipped to make the decisions required to run a modern democracy. Moreover, the speed and spread of information is exponentially higher than it was in the days of ancient Athens. The real problem is that opinion makers, as well as our elected leaders, simply aren’t educated about the wisdom of the crowd, of mobs.

In the last couple of decades, however, we’ve seen an abundance of pretty compelling evidence showing that collective intelligence — the wisdom of the mob, in other words — leads to better decisions than the experts. This is counter-intuitive to most of us, but here and in later columns I’ll explain why this is the case.

Mobs Can Be Smart; Experts Can Be Dumb!

A few examples of how smart mobs can be:

• Crowdsourcing has helped find solution to tough problems that have resisted solution in the private sector. Innocentive has pioneered this model, under which companies pay fees for the ability to present unsolved problems to anonymous outsiders, an army of volunteers that Innocentive coordinates and pays for successful solutions. The company provides solutions anonymously in order not to bias the customer against the solutions, so solutions can be provided by literally anyone. Here’s a paper from Harvard Business Review examining how the Innocentive platform provides solutions to problems that stymie the private sectors best scientists. Jeff Howe’s 2008 book, Crowdsourcing, contains a fascinating account of Innocentive’s history.

• Innocentive’s “mob” is actually a collection of experts in various fields from all over the world, so isn’t this more of an example of bringing in outside expertise, rather than going to a true “mob”? Well, yes. But there are many examples of more traditional “mobs” being really smart in solving problems. An older example goes back to the 19th century: Francis Galton, a cousin to Darwin, came across a competition at a local fair in which people were asked to guess the weight of a live ox after it was slaughtered and dressed. The 800 or so guesses, when averaged, were only one pound off (1,197 vs. 1,198 pounds).

• Was this just lucky? Maybe, but there are many other examples. The “crowd” on the TV quiz show Who Wants To Be a Millionaire picked the right answer to questions posed to them 91 percent of the time — compared to only 65 percent of the time for the experts called upon. James Surowiecki, an expert on crowdsourcing and author of the seminal 2004 book The Wisdom of the Crowd, wrote: “With most things, the average is mediocrity. With decision making, it’s often excellence. You could say it’s as if we’ve been programmed to be collectively smart.”

• The Good Judgment Project, now in its third year, has found that volunteers, collected into small groups and asked to make difficult predictions about world events, are far better than the so-called experts.

Here’s a final fun example. A curious reader of Surowiecki’s book The Wisdom of the Crowd ran his own experiment on Google+ asking his contacts to guess how many Cheerios were in a strange-shaped vase. The median score from 436 guessers was off by only 17 pieces (the crowd’s median guess was 450 and the actual answer was 467).

On the flip side, who knew that experts could be so, well, dumb? A few examples:

• More than 95 percent of all managed bond funds underperform (yes, under) the market.

• Wharton professor J. Scott Armstrong found in a study of expert forecasts: “I could find no studies that showed an important advantage for expertise.”

• James Shanteau, an expert on expertise, found in his work that “experts’ decisions are seriously flawed.”

• Surowiecki writes in his book: “Heretical or not, it’s the truth: the value of expertise is, in many contexts, overrated.”

• Philip Tetlock, an expert on political judgment and self-described “expert on experts of experts,” concludes in his 2006 book, Expert Political Judgment: “Beyond a stark minimum, subject matter expertise in world politics translates less into forecasting accuracy than it does into overconfidence.” Tetlock also reviewed a number of books on how wrong experts can be in an excellent 2010 article in The National Interest.

There are, of course, certain individuals who can indeed be smarter than the mob. Warren Buffet, for example, has consistently beat the market in his investments in various companies. Another example: Nate Silver, a writer for the New York Times who has created his own forecasting methods for election predictions, has been incredibly accurate in his predictions. In the 2012 election he got almost every prediction correct, including the presidential, House, and Senate elections.

However, smart mobs were also very good at predicting the 2012 election outcomes. For example, the prediction market Intrade got most of the election calls (for the presidency and key swing states) correct.

With respect to stock-picking, some companies, including Piqqem, have pioneered crowd-sourced stock picking. It remains to be seen whether this approach can rival the likes of Warren Buffet, but time will tell.

What Makes a Mob Smart?

Mobs aren’t always smart. Mobs can be quite dumb, and historically often have been. What makes a mob smart, according to Surowiecki, are three important features: diversity, independence, and decentralization. Surowiecki writes: “Groups do not need to be dominated by exceptionally intelligent people in order to be smart. Even if most of the people within a group are not especially well-informed or rational, it can still reach a collectively wise decision.”

Diversity is important for collective intelligence because people who are considered smart are generally smart in the same ways and have similar backgrounds. This means they might not be as innovative in suggesting solutions to problems posed to the crowd. Intelligence is a famously slippery concept, but we can define it for present purposes as simply the ability to solve problems. Colloquially we think of intelligence as the ability to solve conceptual problems and people who are “smart” are those who are good with words or mathematical symbols and good at communicating. However, the array of possible problems extends far beyond this traditional conception of intelligence, and it is for this reason that diversity in crowds is so important.

Independence refers to the need for independent decision-making by members of the crowd. Interestingly, the more crowd members confer with each other, generally, the less wise the crowd becomes.

Decentralization refers to the lack of any hierarchy in coming to decisions or solutions for problems posed to the crowd. Hierarchical information flows and decision-making are antithetical to smart mobs because the opinions of all members must be considered equal for the averaging approach to work.

I found it very interesting in reading Surowiecki’s book, which doesn’t touch very much on the wisdom of crowds in democracies, that his three criteria for smart crowds (diversity, independence, and decentralization) apply well in the context of elections. A sufficiently large electorate will almost always naturally be highly diverse, independent, and decentralized. It is only when electoral districts are highly gerrymandered that the natural diversity of most of our communities is reduced, sometimes dramatically.

With respect to decision-making — which, of course, translates directly to the political context that is the topic of this column — Surowiecki writes: “There’s no real evidence that one can become expert in something as broad as ‘decision making’ or ‘policy’ or ‘strategy.’” While I resent this statement, since I am an alleged expert on energy policy, I must bow to the evidence that Surowiecki provides. I also recognize that elected officials, like lawyers, are asked to be experts in some manner on all things that come before them. This is, of course, impossible, as it is impossible for any person to become expert in all fields that concern a modern society.

The very point of enhanced direct democracy, or “wiki democracy,” however, is that it allows society to crowd-source expertise and decision-making. And this can be done, importantly, in a way that avoids the corruption, implicit or explicit, that comes with relying on industry expertise or entrenched politicians and staff.

The alleged experts in political judgment that we elect to make decisions for us in representative democracy here in the U.S., even if they were better than the crowd at political judgments, don’t have time to exercise that judgment well in many cases. Congressmembers, for example, spend so much time on fundraising that they have little time left for their real job — deliberating and voting on bills.

This is a big reason why most elected officials don’t even read the bills they vote on — they don’t have time. So why not crowd-source those decisions to those who do have time and passion to dig into the issues? Why not, as a strong first step in the direction of wiki democracy, allow regular people to comment and mark up bills that come up in Congress and state legislatures? Finland has gone further and allowed its electorate to propose entire bills in an online forum. If a bill gets at least 50,000 votes Parliament must vote up or down on the bill.

Don’t get me wrong: I highly value expertise. I’m an expert in my day job — energy policy. I often have to suppress the urge to shake those I’m trying to convince and tell them “Why don’t you get it? I’m making good arguments here, backed up by good data, and you still don’t agree with me?” At the same time, I also recognize the strong evidence showing the limitations of expertise, particularly in making value judgments and forecasting the future. Combine these limitations with my belief that autonomy and democracy are basic principles for good governance and you get my strong support for more, and better, democracy as the cure for what ails our current version of democracy.

Plato didn’t reject his era’s democratic system without offering alternatives. He wrote a whole book describing his ideal system, which involved a 30-year education for the best and the brightest that would eventually produce men who could offer enlightened rule to the masses. Ironically, the “philosopher king” model of ideal leadership that Plato described in The Republic can now best be found in collective intelligence, in the mob.

I’ll end with my own expert (ahem) prediction: We will see a blossoming of direct democracy in the coming decade around the world as the lessons of crowd-sourced wisdom and decision-making spread far and wide. It is far less certain whether we here in the United States will join this revolution in that same timeframe, a revolution that we arguably started in the modern era but have since abandoned due to misplaced fears about the limits of crowd wisdom.

Tam Hunt is trained as a lawyer and biologist and has studied philosophy for decades. He is a renewable energy consultant and lawyer by day, and avid reader by night. He also teaches part-time at UCSB’s Bren School of Environmental Science & Management. He lives in Santa Barbara, plays tennis, and strums a guitar occasionally.

Comments

interesting take on this, Tam, thank you. A recent study excerpted in NYTimes shows the average American adult reads at the 7th/8th grade level; another shows at least 15% of Americans do not have or know how to take advantage of the internet. We as a people are ripe for demagoguery and for being tricked: look at Iraq war decisions, look at Tea Party fools, c'mon. The security for online elections is horrible. Without meaning to, you've fallen into technological solutionism. I think more effort to improve public education drastically, including civics and government and geography and history -- this is needed for about 20 years prior to attempting an ancient Greek-style "direct democracy".

Yes, mobs of individuals are great at directing the private market. The problem with Democracy is that it allows the majority to use the monopoly force of government to take rights away from the minority through voting. That is wrong no matter how you look at it.

So how do you protect against that?

I don't know the answer, but the best answer I know of is a Constitutional Republic with Democratically elected representatives where the government is limited and the rights of the citizens are guaranteed in the Constitution. But you can't just have it on paper, you need to enforce it. That is the job of every citizen and every representative, to ensure that everybody is secure in their rights, their person and property. That is precisely what is broken with our system, and I don't have all of the answers on how to fix it.

Today we have a government that steals half or more of everybody's property. You get taxed on your income, then everything you buy gets taxed, then when you transfer your property to someone else it is often taxed.. The theft is endless. That is anti-thetical to what I am talking about here.

The government should only be there to protect the rights and property of the citizens, there is really no other function. Every other government function you can imagine can be done on the local level, or even better it can be done within the private market through one of the many techniques outlined in this article voluntarily by the individuals who have a vested interest in making it happen.

Direct Democracy has been something that has occupied my thoughts for sometime. It would certainly remove the influence of lobbyists and those with big bucks made worse by Citizens United. It would prevent hostage taking by a very very small mob in government, as is now happening.

Also, in matters of governance, it would allow those who have different world experiences from the elite few who govern, to have a more representative effect on policy.

It would also help to raise the level of participation in the governance, and a positive side-effect of that would be to raise the knowledge of voters. A good example of voter ignorance was those who think that the Affordable Care Act and Obamacare are different. One person actually wondered why Obama would name the healthcare program after himself, when it was his opposition who did that.

Direct Democracy is more possible now with online tools. However, this has to be available to all including the poor. Possibly it would also reduce the number of conspiracy theorists - because often voters see all sorts of things that are not there, because they are seeing governance through their lenses of powerlessness. But - there has to be better responsibility of news media not to write things that are blatant lies. But, I do believe that "facts" have become more available with mobile devices and computers.

so tabatha we'd agree that there's a greater possibility for the 'wisdom in crowds' with so much more information and data "more available with mobile devices and computers" -- and it's worth considering carefully. At the same time, with the amount of porn and endless sports and sheer garbage available out there...aren't many of us more likely to be 'amusing ourselves to death' or worrying about everything..?? I dunno

Imagine if everybody's income suddenly doubled and there was a Community Kickstarter website to help fund programs that we thought were moral and virtuous. That's what has occupied MY thoughts for some time, not some website where you can go vote for what to steal from other people.

So, you are going to condemn all of those who use computers, mobile devices properly, etc because of the creeps in society.

The Obama campaign used social media extremely well to not only educate voters, but to beat back the millions of dollars doled out to beat him. I am guessing that during the election, responsible citizens would be more involved in following elections to learn more about their choices.

However, I do agree that there is a lot of garbage out there - but for those who do their homework, there are many ways to get to the truth if one tries. The Middle Eastern uprisings in Tunisia, Libya, Egypt, Syria, etc have been covered like no other wars before, with many dedicated to reporting the truth and debunking the lies.

However, there are always those like loonpt, who spend more time making comments than researching whether what they are saying is true or not. "Stealing from other people" is done the most, by the richest companies in mankind's history - the oil companies, via oil subsidies. Farm subsidies are also not inconsequential. Over 90% of the income increases in the recovery have gone to the top 1%. The salaries of the middle class have flat-lined over the last 30 years. If any section of society has been taking/stealing, it is the top 1%.

A good number of Republicans who voted to shut down the government, have taken subsidies from the government. Romney's business started out using government money. Blue states subsidize Red states - i.e. the Red states receive more federal money than they pay in taxes, and Blue states receive less. Most government jobs are in Red states (Mike Lee, tea-partier from Utah just learned that the hard way). The largest number of medically uninsured are in the Texas. When Romney talked about the 47%, he was actually spouting false nonsense. Most of the 47% (receiving government benefits) live in Red states, and thus vote Red.

Yep, there is garbage out there --- all the way from congress, Wall Street, corporations right down to the street - it has been transmitted via newspapers, radio shows (Limbaugh) and computing devices. Those who swallowed what Romney and Limbaugh have said hook line and sinker will probably do the same via digital technology.

If the "mob" is so smart and capable, then why do political campaigns spend the bulk of their war chests on ads that contain 99% marketing and 1% fact? And why do politicians say things straight to the public's face that are designed to misdirect (Ted Cruz, I'm thinking of you)?

Nothing is black and white, but I think there's more truth to Durant's interpretation of Plato than is getting credit here.

DrDan, I agree with you fully that more education is key, I was really heartened by today's NYT story about school "flipping" where some schools are now following the Khan Academy model for every class, where students watch instructional videos as homework and then work through problems and discussion in class. This flipping has had incredibly significant impacts on student achievement already.

That said, I fear you're missing the point a bit of my piece. My key point is that we can and should entrust more and more decisionmaking to the crowd b/c crowds have been shown time and time again, particularly when they are diverse, independent and decentralized, to make better decisions and forecasts than the smartest members of that same crowd and of the so-called experts. So if we devolve power away from the leaders who you correctly point out can in many circumstances fool the American electorate, the risk of being fooled is reduced. At the same time, decentralization of power makes such abuses of power less likely b/c of the difficulties in herding cats.

However, any move toward more direct democracy will necessarily be incremental and should start locally, as I wrote in part I of this series. There are many ways we could implement direct democracy solutions at the local level, such as in local land use decisions, local environmental regulations, and local campaign finance rules, to name a few examples. Any exercise in direct democracy must be subject to the constraints of the judiciary, which will enforce constitutional limits and protect minority rights.

I think a good way to ensure that local direct democracy expansions don't rely on uninformed voters is to hold such votes online but require that each voter get certified for each vote by having to read through the background and relevant discussion points for each vote. This could be required a day or more in advance to ensure that voters don't vote in a knee-jerk manner. So even though there will always be healthy debate about outcomes, at least such votes will be informed by the necessary background - above and beyond simply being a citizen in the neighborhood or town that is impacted by the vote at issue.

I addressed concerns about security in Part I. If we can do $billions in online commerce each year, we can figure out how to make online elections secure - particularly if we start locally and incrementally.

loonpt, sounds like we're on the same page on the idea of devolving power back to the people. However, I think the discussion should, at least in the next decade or so, focus on the appropriate level of governance for each issue area, rather than focus on acting as though the federal government is nothing buy a tyrannical imposition of power. On the tax issue, I'll also point out that the actual tax burden on Americans is far lower than you suggest. That is, when deductions and tax avoidance are figured in, the total tax burden is far below the half of our income that you suggest it is.

I wrote about community Kickstarter ideas in Part I of this essay and I totally agree they should and could be part of the solutions to local problems. However, I warned in that piece, and I'll do it again here, against thinking that those kind of solutions could magically solve all of our problems in lieu of federal or state problems. Could community Kickstarter approaches replace Medicare or Medicaid? Not anytime soon. States, however, could replace the federal role in health care and most health care programs are actually run by states under federal rules that can be implemented with some discretion by each state. I'm all for states rights so I hope to see more discretion granted to states in all areas in coming years.

With respect to minority rights, I agree with you that constitutional limits play this role, and the courts are the primary protectors of such limits. Even if we had far more direct democracy today there is no reason to think that courts should go away. Legal and constitutional decisions are perhaps one area that should be the province of experts (lawyers and judges), at least in terms of application. When it comes to making laws, value judgements are essential, and crowds are fully equipped to make value judgments. In fact, they're probably the best entity to make such judgments if we agree that majority rules is the foundational principle for democracy. However, I'm suggesting here that application of laws to particular circumstances, which is what courts do, may always be best left to experts. But maybe I'm wrong on that.

Anyway, my key point is that there's no reason that minority rights would be treated any differently in a more directly democratic system than in a representative democracy.

I disagreed with you very carefully in your part I about the security issues, Tam, and other posters and I agreed you were pie-in-the-sky about thinking full computer-voting security was at all likely anytime soon.

tabatha, I'm a bigger opponent of the largest oil and multinational corporations than you are, even though you think you are a bigger opponent just because you want to tax them.

Many of the biggest richest companies are that way because they used the power of government and the leverage of counterfeit based state sanctioned banking practices to regulate and invest their way into a monopoly or cartel of other large business owners. It's called the Bilderberg Group, Alex Jones makes documentaries about them, maybe you should actually research who they are and what they do instead of telling me to go out and research. The truth is the heads of the biggest companies in the world don't support free markets, they support big government because big government policies assure that they stay at the top. All they have to do is send lobbyists to D.C. and make sure that their industry can only be run a certain way, through strict federal regulations, that don't allow competing firms with competing ideas to exist and grow. The funny thing is the Koch brothers aren't even libertarian, they head what are called 'beltway libertarian' groups who don't actually believe in libertarianism philosophically, all they believe in is making sure government stays out of the way of THEIR businesses, even if that means infringing on other people's property rights via pollution, counterfeiting other people's money or going to war overseas for business strategic interests. That is NOT libertarianism, and most libertarians don't pay attention to the Koch brothers or look up to them in any way shape or form.

On the other hand, companies who legitimately become wealthy by creating products and services, competing with other firms on price and quality, are actually very good for society. They make most of the stuff we need, and the more stuff they make the more we all get to have. Of course we know it doesn't work that way for military contractors when we pay several million dollars for bombs and fighter jets to kill a few dozen innocent arabs in Afghanistan, of course it doesn't work that way for Monsanto who supports all of the big agricultural companies who make our addictive and unhealthy yet unbearably cheap, subsidized processed foods.. But we don't need to punish the productive people in society who are providing everybody else with the most goods and services just because of some bad apples when we can trace those bad apples to big government policies that could easily be abolished.

I am sure there are areas where many people agree, and have common ground. It may have a lot to do with what one has read, and what one has experienced.

However, I do not remember saying anything about "taxing them". Right now, in the US, we are paying the lowest taxes for many many decades. At one time, rich people had to pay something like 90%. I am for FAIR taxes - Romney should not pay 15% while poorer people pay a higher rate. Poorer people actually do real work to earn their money - many in the 1% just push money around, and do dubious deals for their wealth.

I have worked for small, medium and big companies. There are pros and cons for each.

When I wrote my previous post, I was trying to remember a book I read some years ago which made a strong impression on me, and to some extent has some parallels with this article. "Search of Excellence". Some basic principles, of which #4 and #8 were the most important to me.

Peters and Waterman found eight common themes which they argued were responsible for the success of the chosen corporations. The book devotes one chapter to each theme.

- A bias for action, active decision making - 'getting on with it'. Facilitate quick decision making & problem solving tends to avoid bureaucratic control

- Close to the customer - learning from the people served by the business.

However, since these apply to daily activities, where all employees get to learn the "truth", with regard to politics, it would take a lot to weed out the enormous amount of misinformation dished out to the public on a daily basis. (Once I caused a Yahoo article to be taken down, by pointing out a number of verifiable errors.) There are bad apples in every facet of life - public, private, government, sports, etc.

P.S. Alex Jones is full of it. And believe me, I only dismissed him after reading some of the stuff he has written.